Two different forecasting techniques were used to forecast the demand for cases of bottled water in a store. Actual demand and the two sets of forecasts for the seven periods are as follows:

		Forecast Demand
Period	Demand	F1	F2
1	71	70	71
2	75	72	71
3	70	73	70
4	72	74	71
5	74	75	73
6	76	77	78
7	81	78	78

a-1.Calculate the MAD for each set of forecasts.(Round the final answersto 2decimal places.)

F1
F2

a-2.Which technique appears to be more accurate? (Click to select) F1 F2

b-1.Calculate the MSE for each set of forecasts.(Round the final answersto 2decimal places.)

F1
F2

b-2.Which technique appears to be more accurate? (Click to select) F1 F2

c-1.Calculate the MAPE for each set of forecasts.(Round the final answersto 2decimal places.)

F1	%
F2	%

c-2.Which technique appears to be more accurate? (Click to select) F2 F1

d-1.Do all three of forecast errors provide the same conclusion (i.e., are they consistent) in this case? (Click to select) No Yes

d-2.Do you expect consistent results in every case? (Click to select) Yes No , (Click to select) F1 F2 will have lower MSE than (Click to select) F1 F2 if obs 7 for F1 was 83.

e. In practice,eitherMAD, MSE, or MAPE would be employed to compute a measure of forecast errors. What factors might lead a manager to favour one?

MAD	(Click to select) is more sensitive to large forecast errors. is easy to calculate. is easy to understand.
MSE	(Click to select) is easy to calculate. is more sensitive to large forecast errors. is easy to understand.
MAPE	(Click to select) is more sensitive to large forecast errors. is easy to calculate. is easy to understand.